A Kalamazoo Michigan tax preparer was convicted of 27 counts of tax fraud. 25 of the counts were for filing false returns for her clients, and two were for filing false returns for herself.
Ms. Fontrice Lenee Charles, also known as the “#1 Tax Lady” is facing a life behind bars. Prosecutors alleged that #1 Tax Lady lied on tax documents to get her clients larger refunds. The U.S. Attorney stated that she was involved in 967 bad tax returns filed for clients between 2011 and 2014. They led to improper tax refunds of approximately $4 million. Each of the 25 counts is punishable by up to five years in prison, and the the final two counts regarding #1 Tax Lady’s own taxes are each punishable by up to three years in prison.
This conviction reflects a trend toward the government coming down hard on tax return preparation businesses that don’t follow the law. What’s interesting is that the charges for her not reporting the income she was earning in her tax business were not as serious, nor was the charge that she was illegally claiming a dead person as a dependent.
In other words, not reporting income you earned or claiming excess deductions on your own return is a bad idea. But helping others not report income or claim bogus deductions is an even worse idea. The IRS and Justice Department are now more likely to crack down on tax preparers who are defrauding their clients and the government at the same time.
By the way, even if your tax preparer is not on the up and up, you are still responsible for the contents of your tax return. You, me and everyone else is required to sign our returns under penalty of perjury. In the event that you are audited, it’s typically not a valid defense to blame your CPA or tax preparer for inaccuracies on your return.
So review your return carefully and raise any questions you have with your tax professional.
If you’re worried about a tax problem, let’s talk. I can help. Call me for free at 800 659 0525.
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